We have secured green loan certifications for loans related to our 20 MW solar rooftop project, our 100 MW solar park and other USGBC LEED pre-certified buildings. We are the first in the Indian real estate sector to receive a green loan certification from Climate Bonds Initiative, which mobilizes global capital for climate action towards a low carbon and climate resilient economy.
We have created an ESG checklist, and all proposed acquisitions now undergo an ESG due diligence which would be certified by external advisor(s) and presented to the Investment Committee. Additionally, we have strong related-party safeguards in-place for all acquisitions. For all future acquisitions, we aim to bring the asset under the purview of our net zero commitment within 5 years post the completion of the acquisition.
We are committed to maintaining our strong corporate governance standards and continuously endeavour to further refine our disclosures in sync with global best practices. In line with regulatory guidelines, we publish quarterly financial results and semi-annual performance reports as well as an annual sustainability report aligned with the Global Reporting Initiative (GRI) framework. We intend to align our disclosures to Task Force on Climate-Related Financial Disclosures (TCFD) by FY2025.
Embassy REIT’s conduct of business is underpinned by a commitment to high standards of corporate governance, which are aligned with global best practices. Our governance philosophy emphasizes accountability, transparency and integrity, with a view to maximizing unitholder value.
1. Our Governance Structure: Embassy REIT is managed by Embassy Office Parks Services Private Limited (EOPMSPL), herein, referred to as the ‘Manager’. The CEO of the Manager holds responsibility for the day-to-day functioning of Embassy REIT and is accountable to the Board of Directors. The Board consists of eight Non-Executive Directors, half of whom are Independent Directors and the rest are Nominee Directors. Together, they bring to the table, many decades of experience and expertise in diverse fields such as Finance, Investment, Healthcare and Business Administration. The Board is chaired by a nonexecutive Director and has 12.5% women representation. For further details, refer these links (Our Structure, Board Of Directors, Management Team, Committee Composition).
2. Our Policies: A comprehensive set of compliance policies guide the governance of the organization and ensure strict adherence to the REIT regulatory framework to protect the interests of our unitholders. For further details, refer these links (Environment Policies and Reports, Social Policies and Reports, Governance Policies and Reports).
3. Our ESG Governance: At Embassy REIT, an ESG committee has been established to drive the organization’s ESG agenda. The ESG committee is a cross-functional management committee of the Manager and is chaired by the CEO, with the Head of Operations as the Secretary. For further details, refer these links (ESG Governance).
4. Strong Regulatory Framework
At Embassy REIT, we strive to adhere to all regulatory requirements that govern our operations. We continuously monitor our adherence to the relevant laws and on a quarterly basis any non-compliance with regard to environmental, social and governance related laws and requirements is reported to the Board.
Embassy REIT has a robust risk management framework to address risks that arise from the economic, operational, social and environmental ecosystems that we operate in. Under oversight of the Manager’s Board, the organisation’s Risk Management committee is responsible to identify discrepancies early on articulate mitigation options, oversee implementation and track ongoing action to assess extent of impact in terms of risk reduction.
Cumulative green/sustainable finance portfolio
TARGET
₹35 bn by FY2025
FY2023 PROGRESS
₹34.8 bn
Continue engagement with financial institutions and agencies to seek opportunities to expand our ‘Green loan’ book
ESG due-diligence for acquisitions
TARGET
100% by FY2023
FY2023 PROGRESS
ESG due-diligence completed1
Undertake ESG due diligence for all acquisition opportunities assessed during the period
TCFD compliant annual report
TARGET
100% by FY2025
FY2023 PROGRESS
Summary TCFD disclosure planned for FY2023 ESG report
Further disclose TCFD metrics in FY2024 reporting, with an aim for full TCFD alignment by FY2025
Continue participation and score improvement in GRESB, S&P CSA, FTSE Russell, CDP Climate Change benchmarks
Adopt and follow best-in-class governance framework
FY2023 PROGRESS
Quarterly ESG updates to the Board
Continue quarterly reporting of the progress on ESG roadmap to the ESG committee and Board
Compliance with all SEBI regulations within prescribed timelines
FY2023 PROGRESS
Zero incidents of non-compliance
Continue adherence to SEBI regulations
Continuous monitoring and mitigation of key risks
FY2023 Progress
TCFD risk assessment and financial impact analysis conducted, and mitigation strategies developed
Implement mitigation plans for the key identified risks
Initiate property-wise detailed risk assessment
Develop 3-5 year roadmap based on the outcomes of the TCFD assessment conducted in FY2023
Note: Targets set against baseline of FY2020 actuals for the portfolio (including Embassy TechVillage acquisition)
Studies
Embassy REIT was awarded a 5-star rating by GRESB, the leading global ESG standard for real estate and infrastructure investments, for its entire 42.8 msf operational and development portfolio. GRESB has also recognized Embassy REIT as a Sector Leader for office development in Asia for its sustainability leadership, a milestone for an Indian REIT. Embassy REIT achieved an overall GRESB score of 96% for its Development portfolio and 87% for its Standing Investment portfolio. Embassy REIT stood out with a full score on the ‘Governance’ pillar of the GRESB Real Estate assessment, reflecting the best-in-class corporate governance standards adopted and followed by the REIT.
We have expanded our sustainability strategy to our capital structure by seeking opportunities to raise green debt or to certify existing debt as green. In October 2021, Embassy REIT raised SPV-level debt of ₹6.5 billion from Axis Bank which was used to refinance a construction loan for its 100 MW solar project in Bellary, Karnataka. In February 2022, an additional loan of ₹800 million was secured for the ongoing construction of one of Asia’s largest solar rooftop projects of over 20 MW scale across pan-India properties of Embassy REIT.
In March 2022, for these 2 loans totalling ₹7.3 billion, we received a green loan certification from the Climate Bonds Initiative, an investor-focused international not-for-profit organization working to mobilize global capital for climate action towards a low carbon and climate resilient economy. With this, Embassy REIT became the first organization in the Indian real estate sector to receive a green loan certification from Climate Bonds.
Post this certification, we secured total cumulative sustainable financing of around ₹22 billion, much ahead of our earlier announced FY2024 target of ₹10 billion. With this, around 50% of our total SPV-level debt and 16% of our total debt book comprises of green loans. We continue to work towards oursustainability vision by scaling up our ongoing ESG programs and commitments. In line with this, we upgraded our cumulative green financing target to ₹35 billion by FY2025
